Disruptions that will reverberate beyond 2020 — strategies for weathering, or taking full advantage

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Updated Nov 17, 2019

At a certain point it may seem like we are reliving experiences in our businesses over and over again. As in the movie Groundhog Day, personal and business cycles repeat, and repeat again.

We’re living and working comfortably when — BAM! — here comes a punch in the face. Knowing history may be very valuable, yet difficult to understand. Popular theory says most people’s grasp of history is limited to what we have lived through and personally experienced.

For example: The below timeline for just the basic hours of service rules. How many have you experienced? There are always lots of comments and complaints related to the 2003 change killing our ability to extend the duty window with mid-period rest (the current 14-hour rule), but there’ve been other changes.

Hours of service through the years

Hours Of Service Historical Timeline Changes 2019 11 11 16 00

How any of us adjusts to seismic shifts has a huge effect on our future. While change can be difficult, it isn’t impossible or by any stretch always negative. Resiliency is the ability to bounce back and adjust to the challenges — a natural toughness, you might say. This personality characteristic may be what allows you to survive as an entrepreneur. With effort, too, it’s not impossible to develop and nurture this valuable trait.

Business disruptions create challenges, but opportunities emerge, too. The 2017 electronic logging device reg implementation reduced available capacity, driving rates higher while the nation’s economy and business climate improved. The natural consequences: a rapid push by companies to take advantage by purchasing equipment and hiring drivers. Was this business decision of quantity over quality wise? Perhaps in the short term, but what of the long-range planning?

Several major disruptions are in the offing that will have unknown effects. The California A.B. 5 law leading the headlines has displaced much of the chatter around full implementation of the ELD rule next month – much of that had been about the loss of any ability to customize an e-log’s automatic switch to the drive status. With full ELD implementation, that happens at 5 mph. something every driver seems to agree is totally unreasonable.

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What impacts could A.B. 5 bring when it comes to carrier capacity and the rest of the country’s freight rates, as independent contractors move their businesses out of California searching for work? Will there be a rate spike in California that some companies will find ways to capitalize on?

Also welcome to the mix IMO 2020 – that’s not “in my opinion” 2020, as it were, but rather stands for the International Maritime Organisation. The IMO 2020 rules will shift worldwide maritime vessels to lower sulfur fuel formulas. This could stretch refineries’ ability to meet demand. Some projections are increases of 25-50 cents per gallon of diesel fuel. If you’re an independent, how can you prepare for this? If your company is in the process of submitting contract rates for the first quarter or beyond, how will you be able to educate the customer and negotiate a reasonable fuel surcharge?

Many who rely on the spot market have not been in a position to negotiate surcharges. Get ready: be prepared for cost adjustments, and look for opportunities to reduce operating costs in other areas.

Can anyone predict the effects of the 2020 election cycle on transportation of goods and services? I dare not even pretend to know what businesses will be doing.

These are just a handful of potential disruptions we already know about. My experience has taught me that the small business owner-operator does have certain advantages navigating market disruptions. An example of this is when natural disasters hit communities it’s often the independent who steps up to fill the gap, aided and abetted by our own ability to make decisions faster, react quickly, tighten our belts and trim unnecessary fixed cost.

As the owner driving, you know better than anyone else your personal hours of service and ability to operate efficiently, allowing you to provide the best customer services a customer hopes for when there are smaller local or regional disruptions. Dare to see and think differently, provide the service the other carriers fail to and really envision your future. And be careful, of course, when the temptation to follow the crowd rears its head, as it will in due course.